UK-based generative AI startup Stability AI has announced it’s raised fresh funds and appointed a new CEO, three months on from the departure of founder Emad Mostaque.
Investors include Greycroft, Coatue Management, Sound Ventures and Lightspeed Venture Partners, alongside ex-Facebook president Sean Parker and former Google CEO Eric Schmidt. The size of the round is undisclosed.
Prem Akkaraju, who was previously CEO of visual effects company Weta Digital, has taken on the CEO role (and also invested in the company). Parker joins Stability AI’s board as executive chair.
“This infusion of capital and leadership will be instrumental in accelerating Stability AI’s growth and ability to deliver best-in-class generative AI products into the market for consumer and enterprise use,” the company said in a statement.
Turbulent times
Stability AI emerged as one of the most promising European generative AI startups when it raised a $101m round in October 2022, with investment from Lightspeed and Coatue. The investment followed the release of the popular image generation model Stable Diffusion, which Stability AI helped finance.
The startup hit choppy waters in 2023 when it was sued by Getty Images over copyright infringement. That year it saw an exodus of talent, which included 10 senior employees and its head of audio — who resigned due to copyright concerns.
Stability AI raised $50m from Intel in late 2023 — in a deal that saw Stability committing to using a majority of the round to purchase access to the US chip company’s hardware resources, sources told Sifted.
In December, the company announced it would be moving away from its former open source business model and putting its most advanced AI models behind a paywall for enterprise customers, via monthly subscription.
More people moves came in 2024 as the company quietly replaced its CTO and lost one of the leading members of its technical staff, research scientist Robin Rombach.
In March, founder and CEO Mostaque resigned from his role and stepped down from his position on the board of directors. The company made layoffs following the departure.
